News agencies are reporting that the Icelandic ruling coalition resigned on Sunday, thus incapacitating the government, "three months after the collapse of the country's currency, stock market and several major banks, and following months of public protests."
Iceland's financial system and currency collapsed in October following a series of bank failures, forcing the International Monetary Fund to intervene.I believe this is the first direct government casualty as a result of the ongoing financial crisis, although one could argue that the American elections in November could also count as a casualty. I won't officially count it, as I think there are too many other reasons to point to that caused the collapse of Republican rule.
Iceland sought IMF help after its government was forced to nationalize three banks to head off a complete collapse of its financial system. Trading on the country's stock market was suspended for nearly a week, and inflation jumped to more than 12 percent.
The IMF announced in November it would pump about $827 million into the Icelandic economy immediately, with another $1.3 billion coming in eight installments. Iceland's Nordic neighbors -- the governments of Finland, Norway, Denmark and Sweden -- announced they would lend Iceland another $2.5 billion.